Schmidt skirts legal bills by leaving Congress

Former U.S. Rep. Jean Schmidt, R-Loveland, has avoided an order to repay roughly $500,000 that the House Ethics Committee ruled she wrongly accepted in legal fees from a Turkish-American group.

The order stems from a U.S. House committee ruling that Schmidt violated House rules when she let the Turkish American Legal Defense Fund pay for a slew of legal battles against her 2008 Democratic opponent David Krikorian.

While the committee found her error wasn’t intentional and decided not to sanction her, it said she “must disclose and repay the improper gift.”

However, now that Schmidt is out of Congress after losing the Republican primary last year, she no longer falls under the jurisdiction of the House committee and therefore does not have to repay the money, legal experts told the Dayton Daily News.

Schmidt’s final financial disclosure statement filed in March states she owes three legal firms — two named as being paid by the Turkish American Legal Defense Fund in the committee report — between $515,000 and $1,050,000 combined.

The committee allowed Schmidt to create a legal expense trust to raise money to pay down the bills. But it has made only one payment of $42,812, according to the quarterly filings obtained by the Daily News. The only outside contribution to the trust was $5,000 in April 2012 from a company with Turkish ties.

Craig Holman, government ethics lobbyist for the left-leaning political action group Public Citizen, said Schmidt is not obligated to repay the money as long as she doesn’t run again for Congress.

“The House Ethics Committee has no enforcement authority over her so she has left the whole realm of ethics rules that would apply in this case,” he said. “If she is committed to leaving public service altogether she can just cleanly walk away from this.”

Schmidt, whose congressional district included all or parts of Clermont, Hamilton and Warren counties, declined to comment. “I’m not going to comment to you,” she told a reporter before hanging up the phone this week.

The filings also say she holds millions of dollars in assets, mostly in property in the Loveland area.

The legal battle between Krikorian and Schmidt began with a dispute over whether the deaths of more than a million Armenians in 1915 was a “genocide” committed by Turkey. Schmidt refused to support a resolution declaring it a genocide. Krikorian, who is Armenian-American, accused her of taking “blood money” from the Turkish government.

Schmidt accepted the offer of legal assistance from two attorneys with ties to the Turkish groups and challenged Krikorian both in a civil lawsuit and before the Ohio Elections Commission. She alleged defamation and making false statements.

The Elections Commission sided with Schmidt in 2009 and reprimanded Krikorian. Schmidt’s attorneys dismissed the civil lawsuit last year.

But Krikorian filed the complaint with the House Ethics Committee, which issued a report in August 2011 saying that they believed Schmidt was unaware the TCA was paying her legal bills. But despite this, “it was in fact improper and constituted an impermissible gift” the committee found.

“The toothlesness of the House ethics process has been shown,” said Bob Finney, a Cincinnati attorney who represented Krikorian in his dealings against Schmidt. “She took money from those peddling influence from a foreign power to the tune of a half million dollars and never paid any price for it, and the people who enforce ethics in the U.S. Congress think that’s OK.”

Krikorian and Finney also filed a Federal Elections Commission complaint in August 2011, alleging that the paid legal fees were also illegal campaign contributions. That investigation is ongoing.

Holman said the FEC’s jurisdiction does extend to Schmidt after she leaves office. But he said it’s a sharply divided agency and he “would fully expect them to deadlock on a 3-3 vote.”

Finney meanwhile hopes the Federal Elections Commission picks up where he believes the Ethics Committee failed.

“The final chapter has not been written just yet,” he said.

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